Real Estate Investing – a Dutch Case Study

Real Estate Investing – a Dutch Case Study

Last weekend we had our 3rd BENL (Belgium – Netherlands) FIRE meet-up in Utrecht and it was a blast! We had a total of 28 people show up to talk about money and freedom for the day. Many people we had never seen before, you got to love internet finance dating for strangers! We are pumped to do this again later this year and plans are already being made for that meetup. As part of the meetup I also did a short presentation: Real Estate investing – a Dutch Case study.

A slightly shorter version of this presentation is provided below. It includes some additional comments based on the feedback during the meetup. Note that this presentation is to provide some basics for property research and selection. It therefore lacks details! If you are really interested in finding the right property for you, additional detailed assessments are required. Such include risk assessments, investigation into the state of the property, taxes, a maintenance plan and more.

Property Screening

The first step into Real Estate investing is high level property screening. For this we use several sites to find properties that match our search criteria. Typical sites in the Netherlands include and If you leave outside the Netherlands, do your search for your applicable sites, which should be easy (i.e.,, etc.).

Real Estate Case Study - Screening
Real Estate Case Study – Screening

Property Selection

Before you can make your property selection, you need to know what you want! Do you want commercial or residential rental unit? If residential, do you want a house, townhouse, condo or even a house boat (for Airbnb rentals).

Real Estate Case Study - Property Selection 1
Real Estate Case Study – Property Selection 1

Once you know what type of property you want, the next will be to look for one. You will have to select on price, location and the general state of the building/property. The latter is important as it affects the sales price. If you are handy and have time, a fixer-upper could be a good one. But if you are not, you should look for something that is ready to move in, but well priced.

Real Estate Case Study - Property Selection 2
Real Estate Case Study – Property Selection 2

The Condo Case Study

For this Case Study I ended up selecting a condo unit in Rotterdam, the Netherlands. This property looked appealing, some maintenance to be done in the bathroom, but generally in pretty OK shape. Price was reasonable too, but not spectacular. A perfect case study!

Real Estate Case Study - The Condo
Real Estate Case Study – The Condo

The Expenses

The first thing to look at are the expenses. We start with looking at the purchase expenses. These include costs for purchase, transfer taxes, notary and financing. Additional expenses could include urgent renovations, which are not assumed here. Please note that we assumed that there is some negotiation space for the price too (i.e. the lower purchase price)!

Real Estate Case Study - Expense Calculations 1
Real Estate Case Study – Expense Calculations 1

The next thing to look at are the monthly expenses for running the property. These include property management, insurance, maintenance, building management (i.e. condo fees), taxes and sewage fees. Because this is a condo, we only include about 1% for the maintenance reservation (otherwise it usually ranges between 2.5 and 3.5%). This allowance is to be used for kitchen and bathroom replacement, and any other things like flooring, lights, etc.

Property Management fees are included due to their tax advantages in the Netherlands (which makes this investment an Box 3 investment, rather than Box 1 income!). We also like the risk management side of things, as these guys have more screening tools than we do.

We included monthly fees and the selection fee (one month rent + VAT @ 21%). The latter is spread over 2 years (i.e. we expect new tenants every 2 years), which is slightly above average in this market segment.

Real Estate Case Study - Expense Calculations 2
Real Estate Case Study – Expense Calculations 2


We assumed we needed financing, so added an investment mortgage of €70k with an interest of 3.85% (5 year term). You might be able to get something cheaper, but will depend on your personal circumstance and other assets you may have.

We quickly calculated the total yearly mortgage costs and the cost of interest only. If you add that to the above expenses, you get the numbers at the bottom of the slide below. For cash-flow the maintenance reservation is not taken into account. As you won’t pay this every year, but likely in lumps  every couple of years. You may decide to do this differently when you are looking at a house. In which case you have yearly heating unit maintenance, for example.

Real Estate Case Study - Expense Calculations 3
Real Estate Case Study – Expense Calculations 3

The Income

Now the fun part starts, the money coming into the bank account! We normally use 3 scenarios for screeing purposes, so get some feel for the spread and associated cash-flow scenarios. These scenarios are based on 12 month occupation (best case), 11 months (base case) and 9 months (worst case). Albeit it should be noted that it could be way worse! For example if a tenant does not pay and you cannot evict due to strict tenant protection laws.

Real Estate Case Study - Income Calculations 1
Real Estate Case Study – Income Calculations 1

Now the next step is to find out net income, so after the expenses shown in the previous paragraph. When you do, this is what  you get:

Real Estate Case Study - Income Calculations 2
Real Estate Case Study – Income Calculations 2

Not bad, even in a worst case scenario you are still cash-flow positive! Well, at least you are close to breaking even, because utility costs are not included in the expenses for the 3 months you do not have a tenant. As a landlord you are responsible for these costs at about €15-30/month (subject to usage and utility rates).


So what does this all mean in terms of yield on your investment? The shown yields are not really great to be honest, especially considering the risks you take as a landlord. You kind of what to have a cash-flow yield around 8-10% in this leverage scenario. In short, you either have to get the property for less. If you cannot, you have to walk and look for something else.

Real Estate Case Study - Cash Flow Yields
Real Estate Case Study – Cash Flow Yields

In the ultimate scenario, when all the mortgage is paid off, you get the following (2017 price level: no inflation correction):

Real Estate Case Study - Ultimate Yields
Real Estate Case Study – Ultimate Yields

Not great yields, but your cashflow is likely about €4.5-5.0K average per year. With about 7 of these, and wealth taxes included, you would be FI!

Disclaimer and considerations

Some important assumptions and considerations apply to this simplified calculation, and its results:

Real Estate Case Study - Other Considerations
Real Estate Case Study – Other Considerations

If you have any questions, do leave a comment!



  1. I wonder how renting out a property in the Netherlands can ever be profitable. I’ve done some calculations: based on your presentation above, but if I play with the numbers (higher priced houses with higher rents or condos with lower rent incomes), it never seems profitable. And even if it is, it seems only by a small margin (2k per year or so). Can you point out the flaws in my doc?

    1. Hey Bas,
      Sure I’ll have a look, but I currently don’t have chrome installed on any of my systems. Will get back to you on this. That being said, it has gotten a lot more difficult finding profitable properties lately (i.e. after the presentation). Prices are really going through the roof. So leverage is more important then ever!

  2. I would love to join the next meeting if that is possible. I am rather new in the FIRE but I have read most of your articles with great enthusiasm and cannot wait to calculate my own path to FIRE. Despite the fact that I haven’t read much before, I think I’m on track. Hope to hear from you.

    1. Hello MR Horizon,
      Can do! We are planning the next meet up for early November. Will make sure you are contacted and be put on the distribution list. Have a great weekend/Sunday.
      P.s. Glad you enjoy the posts and find them useful!

  3. Thanks a lot for this writeup. Very interesting to see what to check and look for.

    Now I need something like this for options trading 🙂 You seem to be doing quite well in that front as well!

  4. Great case study Cheesy Finance! Thanks for sharing! The currencies and taxes might be different from what I’m used to, but it’s the thought process that counts!

    1. Indeed, the screening process, ultimate purchase price and cash flow are really what matters. It’s important to be critical!
      Thanks for the comment Mr Tako!

  5. Great case study and just at the right time for me 🙂
    One question: do you have any calculation on how much is the benefit (if you also include management fees) if it is treated as an investment rather than an income?

    1. No, as this completely depends on your income (i.e. your Box 1 income) and the amount of wealth you have (i.e. assets and debts you can use in Box 3). However, I believe I did do a post a while back with a rough indication. Check out some of the older posts under the Real Estate category.

  6. Thanks so much for organising this blind date for personal finance idiots! I loved it! 🙂

    What a good idea to publish your interesting presentation here as well. It just didn’t fit in my ‘Europe story’, but it would have been a shame if others would have missed it. Together we agreed that you should take the investment opportunities you love. For Mrs C and you that is cleary real estate!

    1. “blind date for personal finance idiots” …. priceless! 🙂
      We certainly have a passion for Real Estate, despite all it’s flaws and drawbacks. Perhaps we will wise up in the future 😉

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